How to receive gratuity from customers

With our iPad Point of Sale for restaurants, retail stores, fast food, bars, coffee shops, mobile kiosks and food trucks, you can easily accept, process and track the gratuity offered by your customers, including the gratuity offered on credit card payments. This is especially useful for restaurants and other service providers, and our innovative solution solves the usual limitations on accepting tips on credit card payments, like the restriction on the gratuity amount to be less than 20% of the total sale amount, the necessity to manually settle all the credit card payments at the end of the day, and the upcoming changes for the chip-enabled smart credit cards and payment terminals that are needed for the EMV liability shift.

Today, when paying for meals at restaurants, or for other various services, customers often add tips for servers when they sign their credit card receipt. However, tips over a certain percentage of the bill can trigger flags for fraud, resulting in card issuer-initiated chargebacks, or can cause your transaction to be downgraded to a more expensive interchange category.

When credit and debit cards are swiped in a restaurant, the amount authorized includes a 20% "tip tolerance". This means that when you swipe a customer’s card, it will be approved if the customer has funds available for the total cost of their bill plus 20%. This is done to ensure that there are enough funds available for the possibility of a customer leaving a 20% tip.

In some cases, customers tip more than 20%. If they do, the transaction may set off a warning ("flag") to the issuer to check for fraud. The issuer could decide to initiate a chargeback, requiring information from your business about the transaction to determine the validity. Plus, a tip more than 20% can trigger the possibility of an interchange downgrade, which means that a transaction is routed through a more expensive interchange category, resulting in a higher cost for you.

Our iPad Point of Sale system has implemented a new procedure that will work for all card types, and it will also minimize staff and customer confusion. This new procedure requires altering the current process of tipping that customers and servers are used to, and it requires to request that the customer adds the tip prior to processing the transaction. In order to do this, the server will have to follow these steps:
  • Print a copy of the bill and give it to the customer.
  • The customers will write their tip amount and transaction total on the bill.
  • The server would then take the card to the payment terminal as usual and process the transaction. All the available payment screens include a special field where the server can enter the gratuity amount offered by the customer
  • The server will print the payment receipt and it will return the card and the receipt to the customer.
  • The customer will sign the receipt that already includes the tip in the total.


  • Our solution is also future-proof for the EMV liability shift, when the liability for most counterfeit card fraud that occurs at the merchant's store location is shifted to the merchant, unless the merchant has upgraded their card acceptance and processing systems to use chip-enabled devices.